Refinance

Refinancing a loan is the process of taking a loan or loans to pay off an existing loan secured by the same property and typically by the same borrower's.

There are essentially two types of refinance products:

• rate and term
• cash out

A rate and term refinance is one in which the objective is to change the interest rate (ideally lower) and the term (usually extending it) in order to obtain a lower and more manageable monthly payment.

A cash out refinance is one in which a larger loan is taken out to pay off a smaller one, with the difference in cash (equity) going to the homeowner.

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